Quiz Chapter 12
Question 1
1.1 out of 1.1 points
Everything else equal, significant trade deficits, imports exceeding exports, should have what effect on a country's exchange rate?
Selected Answer:
C.
The country's currency should depreciate in value relative to their major trading countries.
Question 2
1.1 out of 1.1 points
Which instrument is issued by a bank?
Selected Answer:
Letter of credit
Question 3
0 out of 1.1 points
Common causes of “capital flight” include all the following except
Selected Answer: high inflation in the host country
Question 4
1.1 out of 1.1 points
With reference to international balance of payment accounting, if a country's merchandise imports exceed merchandise exports for a period,
Selected Answer:
A.
the country has a deficit in the merchandise trade account.
Question 5
1.1 out of 1.1 points
A Mexican importer of computer parts from Canada would take which action in the foreign exchange markets?
Selected Answer:
C.
demand Canadian dollars
Question 6
1.1 out of 1.1 points
Both forward foreign exchange markets and foreign currency futures can hedge foreign exchange risk.
Selected Answer:
True
Question 7
1.1 out of 1.1 points
When a commercial bank issues a payment guarantee on behalf of an importer, that guarantee is
Selected Answer: a letter of credit.
Question 8
1.1 out of 1.1 points
Eurobonds are bearer bonds and do not have to be registered, which makes them more marketable.
Selected Answer:
True
Question 9
1.1 out of 1.1 points
A U.S. commercial bank must pay 20 million Canadian dollars (C$) in 90 days. It wishes to hedge the risk in the futures market. To do so the bank should
Selected Answer:
B.
buy C$20 million in Canadian dollar futures.
Question 10
1.1 out of 1.1 points
1.1 out of 1.1 points
Everything else equal, significant trade deficits, imports exceeding exports, should have what effect on a country's exchange rate?
Selected Answer:
C.
The country's currency should depreciate in value relative to their major trading countries.
Question 2
1.1 out of 1.1 points
Which instrument is issued by a bank?
Selected Answer:
Letter of credit
Question 3
0 out of 1.1 points
Common causes of “capital flight” include all the following except
Selected Answer: high inflation in the host country
Question 4
1.1 out of 1.1 points
With reference to international balance of payment accounting, if a country's merchandise imports exceed merchandise exports for a period,
Selected Answer:
A.
the country has a deficit in the merchandise trade account.
Question 5
1.1 out of 1.1 points
A Mexican importer of computer parts from Canada would take which action in the foreign exchange markets?
Selected Answer:
C.
demand Canadian dollars
Question 6
1.1 out of 1.1 points
Both forward foreign exchange markets and foreign currency futures can hedge foreign exchange risk.
Selected Answer:
True
Question 7
1.1 out of 1.1 points
When a commercial bank issues a payment guarantee on behalf of an importer, that guarantee is
Selected Answer: a letter of credit.
Question 8
1.1 out of 1.1 points
Eurobonds are bearer bonds and do not have to be registered, which makes them more marketable.
Selected Answer:
True
Question 9
1.1 out of 1.1 points
A U.S. commercial bank must pay 20 million Canadian dollars (C$) in 90 days. It wishes to hedge the risk in the futures market. To do so the bank should
Selected Answer:
B.
buy C$20 million in Canadian dollar futures.
Question 10
1.1 out of 1.1 points